"A win for common sense; it was a win for the residents of the park; it will be a win for the government in getting the money they need to put into housing; and it will be a win for the people who don't have housing and who the government will provide housing for to get off the street."

Housing Minister Tim Mander was similar in his assessment of the decision, describing it as a "win-win situation".

"Currently, Lazy Acres doesn't take people off the social housing waiting list. This will ensure that we boost the supply of social housing in areas where it's really needed," Mr Mander said.

"Meanwhile, residents at the park can have complete peace of mind that their tenancies are secure."

Shadow Housing Minister Jo-Ann Miller said she was pleased with the decision, and labelled it a "win for common sense".

However, she was quick to point out the toll the process had taken on people who lived in the park.

"The residents, who are mostly elderly, should never have been put through all this trauma in the first place," Ms Miller said.

"It's completely unnecessary... I am aware a number of the residents were becoming quite ill with stress and worry."

Mr Mander said there were more than 23,000 households on the social housing waiting list.